More people are working now than ever before in our country’s history. We are approaching full employment, where there is a job for everyone who wants one. The experience of the lost decade that followed the crisis with its trauma of mass unemployment, emigration, and loss of hope, means that government and politicians cannot become complacent and assume that full employment can be taken for granted. We have never before in our country’s history achieved sustainable full employment. That is our challenge now, and it is one that Fine Gael will embrace.
Our ambition is that:
- every person has the opportunity to get a job, go to work and earn a decent wage;
- we are prepared for the major changes that artificial intelligence, robotics and other disruptions that will come to the workforce in the years ahead;
- we give people greater security through a radically reformed Social Insurance system; and
- government helps workers in having the opportunities to up-skill and retrain so people have continued opportunities throughout their working life.
Among the actions that will be brought forward to meet this ambition are:
Future Jobs Programme
We must ensure that we are prepared for the technological changes that continue to radically redefine the type of work being done. Developments such as robotics, artificial intelligence, and advanced manufacturing are all changing the workplace. We must ensure that the current and future workforce is prepared for those changes and that we actively embrace them so as to maintain our national prosperity. For example, although estimates vary substantially, some studies indicate that up to 40% of jobs are likely to be substantially impacted by automation over the twenty years while the transition to a low-carbon future will radically change sectors of the economy.
Furthermore, as we look to the future, ‘Project Ireland 2040’ projects a population increase of about 1 million people in Ireland in the next 20 years. This will require the creation of 660,000 additional jobs to achieve and maintain full employment. We must also prepare for a further economic environment where our use of carbon for energy is significantly reduced.
We must face these challenges now. The concern is that given strong economic performance, we become complacent, less concerned about, and less prepared for the forces of change that are already upon us. As we reach full employment, there are also concerns that we will repeat the mistakes of the past and fail to manage a potentially overheating economy.
Fine Gael in government is driving the development of a new Future Jobs Programme. This will set out on annual basis the key actions that need to be delivered across government in the areas of skills and talent, innovation, productivity, preparing for a low carbon economy and participation. Delivery of this will help guard against repeating the mistakes of the past and ensure our long-term national prosperity.
Winning the international war for talent
There is an international war for talent. Ireland must be the most adept at providing the talent to deliver new technologies to support innovation and to develop entrepreneurship.
Ireland must equip employers and workers to anticipate and adapt to a changed workplace and ensure that those who might be displaced are upskilled.
The National Skills Council, and the nine regional skills fora, will drive Ireland’s ambition to be a world leader in anticipating and responding to skills needs. We will expand Springboard and focus it on upskilling in areas of skills shortages for people who want to upskill, who are re-entering the workforce, or to people who have been made redundant.
The ‘Project Ireland 2040’ Disruptive Technologies Innovation Fund
As part of ‘Project Ireland 2040’, a Disruptive Technologies Innovation Fund has been established and which had its first call for applications this year. Disruptive technology is that which has the potential to significantly alter markets and their functioning and significantly alter the way that businesses operate. While it involves a new product or process, it can also involve the emergence of a new business model. Disruption is about the combination of technology and business model innovation.
€500 million is available for co-funded projects involving enterprises and research partners over the next decade. This fund is to promote collaborative enterprise-driven partnerships that will develop, deploy and commercialise disruptive technologies to transform business. SME participation is an essential requirement in every consortium.
We will closely monitor the success of the first rounds of the Disruptive Technologies Innovation Fund and assess whether there are other methods of leveraging greater private or European investment in the fund.
Ensuring that everyone who wants to work, can
Fine Gael believes in the value and importance of gainful employment. With the decrease in unemployment we have helped those looking for work. The next step is to help people who have lost connection with the workforce. Unfortunately there are barriers and disincentives to people seeking gainful employment which need to be removed. Therefore to place a whole-of-government focus on reducing such disincentives, we will set a target of increasing the work force participation level. Some of the measures required to improve this are highlighted separately within this document (e.g. supports to access training, childcare, etc.) but will also include increasing income disregards for benefits when a person is returning to the workforce as well as allowing them to maintain benefits and entitlements for a period. Delivery of the ‘Action Plan for Jobless Households’ is important in this.
Currently there are over a quarter of a million people with disabilities receiving a social welfare illness or disability weekly payments in Ireland. Almost half of these are receiving Disability Allowance. Ensuring people with disabilities are enabled to achieve their employment ambitions is one of the most significant labour market and social policy challenges. Fine Gael is committed to continuing to implement the recommendations in the ‘Making Work Pay Report’ e.g. measures such as fast-tracking the return to Disability or Invalidity Pension for people where employment does not work out, thereby reducing the ‘risk’ factor of taking on employment opportunities.
Prepared for the Digital Revolution
A digital revolution is transforming the world we live in. The development of artificial intelligence and increased automation present challenges and opportunities. The pace of change is set to accelerate. By one popular estimate, 65% of children entering primary school today will ultimately work in a completely new job type that does not yet exist.
This presents a challenge to our workforce, but also to our society more generally. Our education system must help people to adapt to these rapidly moving tides. We will:
- enable the teaching of computer science at Leaving Certificate to all schools that want it;
- integrate coding and computational thinking into the curriculum; and
- allow every school to integrate digital technology into learning where it can improve the capacity of students to learn.
However, we must also equip those in the workforce currently to deal with these changes. We cannot assume that because we as a country are among the leading technologically advanced economies now, that we will remain so in the future. We therefore will ensure that the Future Jobs Programme prioritises lifelong learning to prepare today’s workers for the challenges of tomorrow. We will also seek to promote within the Irish public sector a culture of early adoption of technology, thereby placing technological adoption at the heart of public services.
We will give people more control over their career path
Fewer and fewer people have just one career and one employer throughout their working lives. Having to change jobs and careers, through choice or requirement, is increasingly the norm. This means that people need to have access to training and upskilling in a manner that is flexible and suited to their needs. As part of the ‘Future Jobs Programme’, we will:
- open up training opportunities related to a person’s career and the ability to access career advice/mentoring based on a person’s insurance record without the need to become unemployed;
- increase by 10% the number of those aged 25-64 engaged in lifelong learning by 2020 and by 15% by 2025; and increase by 25% the total number of students studying on a flexible basis;
- give all students the opportunity to undertake a work placement by 2025;
- introduce initiatives to up-skill the workforce particularly in the areas of hospitality, food, retail, childcare and community care using models such as apprenticeship and support traineeship and blended learning suited to those in work, so that those working in those sectors can build their skill sets and develop better career paths;
- create a stronger system of recognition of prior learning so that a wider portfolio of experience can be certified for people with histories of varied working or voluntary activities; and
- continue to evolve employment law so that vulnerable workers have protection.
Investing in Higher and Further Education
We are increasing funding for third-level education through modest increases in the National Training Fund of 0.1% in both 2019 and 2020. In addition there has also been significant increases in the Exchequer contribution. In total, the funding for higher education is more than €300 million higher in 2019 than in 2016.
This allows for the provision of targeted investments in skills and education – 15,000 new places in the higher education and further education and training sectors, 1,200 craft and earn-as-you-learn places; 1,100 traineeships; 8,000 places through Skillsnet Ireland and Springboard; and 5,000 new lifelong and flexible learning opportunities. Further additional funding for the sector will follow the Oireachtas Committee recommendations.
Through ‘Project Ireland 2040’ Fine Gael will significantly ramp up capital investment into the higher education sector– from approximately €800m over the past decade to €2.2 billion over the coming decade. The funding will enable both new buildings and extensive building upgrades.
Through ‘Project Ireland 2040’, Fine Gael have brought in a dedicated €300m capital budget (over the next decade) to the Further Education and Training (FET) Sector for the first time. This will enable us to develop modern, fit for purpose 21st century FET centres and meet the capital costs associated with expansion and modernisation of apprenticeships.
Delivering a €300m Human Capital Initiative to drive innovation at third-level
A new Human Capital Initiative was announced as part of Budget 2019. This will involve investment of €300m in higher and further education over the 5 year period 2020-2024, with €60m being made available in each of those years. The Initiative will incentivise continued reform and innovation, drawing on international best practice through such mechanisms as graduate conversion, accelerated course completion, flexible and blended learning, intensified focus on employability and strengthened linkages and relationships with enterprise.
Apprenticeship and Traineeship
By 2020, we will double the number of apprenticeships and treble the number of traineeships compared to 2016, expanding this model into 100 new occupations, and providing new opportunities to thousands of people at a variety of levels in the qualifications framework. We want to make this route an option open to 20% of school leavers.
We will encourage the University, TU and IOT sectors to work with employers to develop the apprenticeship and traineeship route within higher education. We will develop programmes to improve progression to apprenticeship by groups at a disadvantage.
Ensuring that workers have proper protections
A strong, talent-based economy depends on the interests of workers and their employers being largely aligned. While there will always be a friction, promoting conflict and antagonism is to the detriment of all. Fine Gael believes that workers’ rights should be properly protected from unscrupulous employers. We are therefore legislating to provide further protection to people in precarious employment and in particular to outlaw exploitative zero hour contracts. We will monitor the impact of this legislation and strengthen it further if necessary.
Fine Gael recognises the positive role that trade unions can play in the workplace and in society, especially where they are representing members in vulnerable positions. While we are opposed to any return to national wage agreements and a return to social partnership, we believe that a more collaborative approach between government, trade unions and employer bodies can bring benefits to the public at large. We will seek to consult with both trade unions and employer bodies at an early stage on matters of common interest such as pension reform, employment legislation and childcare provision.
Making Ireland a start-up leader
Promoting a national spirit and culture of entrepreneurship is essential to facilitating a strong pipeline of future start-ups. There needs to be a continued focus upon the ‘National Policy Statement on Entrepreneurship’ which targets doubling the jobs impact of start-ups on our economy over the five years to 2019.
A global innovation leader, ranking in the top ten countries in the world for scientific research
In this uncertain world, it is clear that innovation will be crucial to Ireland’s sustained economic development. We will put the funding in place to ramp up PhD enrolments. It is essential to our long-term international competitiveness.
We are focused on ensuring that over the next decade we are consistently within the top ten countries in the world for scientific research. Among the measures to achieve this, will be continued prioritisation of the work of Science Foundation Ireland. The government is now providing funding to 17 SFI Research Centres, up five from the beginning of 2017. As is set out in ‘Project Ireland 2040’, we will continue the programme, bringing the total number of centres to 20. The new centres will undertake excellent scientific research in partnership with industry to address critical and emerging areas of the economy including advanced additive and smart manufacturing, neurological diseases, and the bio-economy. We will also prioritise the upgrading and expansion of the Tyndall National Institute in Cork so Ireland stays at the forefront of new technologies.
Ongoing tax reform with fairness at its core
Fine Gael’s policy on income tax is built around three core principles. First everyone should make a contribution. Second, those who can contribute the most should contribute the most. Third, those on the average wage should not pay at the higher rate.
First, everyone should make a contribution. We believe that everyone who is in full-time employment should pay income tax or USC for both economic and social reasons. Economically, it is important to have a wide tax base so that our tax revenue is more stable and to allow lower rates of tax. It is also an important part of our social contract that everyone contributes to our main source of tax revenue from which we pay for social services and infrastructure; not that everyone pays the same amount but that everyone makes a contribution.
In government Fine Gael has consistently reduced taxes for the lowest paid so that part-time workers have been taken out of the tax net. At present income tax is only paid on salaries above €16,500 (after accounting for the main tax credits) and USC is paid on salaries over €13,000.
Second, those who can contribute the most should contribute the most. It is only fair that those who earn more should pay more in income tax – that our income tax system is progressive. This also implies low tax rates at low salaries which then increase the incentive to take up employment. According to the OECD Ireland already has the most progressive income tax system in the EU. The latest figures show that the top quarter of earners will pay 85% of all income tax and USC revenues in 2018, and the top 7% will pay for more than half of all income tax and USC.
Third, those on the average wage should not pay at the higher rate. It is not fair that people earning only the average wage pay the top rate of tax. Half of any overtime or bonus that they earn will be lost in tax. The average wage in 2017 was €37,600 for all workers, and €46,400 for full-time workers. However, individuals start to pay the top 40% rate of income tax once their salary reaches €35,300. This is out of kilter with our nearest neighbour the UK where the 40% rate of tax is only reached at over £46,000, putting us at a disadvantage in attracting and retaining employees.
Since 2014, Fine Gael in government have increased the point at which single people pay the top-rate of tax from €32,800 to €35,300. We will seek to accelerate this further in the years ahead. In addition to increasing the point at which people pay the top rate of income tax, we will continue to raise living standards and grow disposable income by reforming personal taxation as follows:
- raise the Earned Income Tax Credit for the self-employed and the Home Carer’s Tax Credit to match the PAYE Tax Credit;
- raise the threshold for CAT below which a parent can pass on assets to their children; and
- merge USC and PRSI to build a stronger social insurance safety net.
Building a stronger safety net
Rather than abolishing the USC outright, we will merge it with PRSI into a single social insurance payment. The end goal – a social insurance system based on the contributory principle that delivers real benefits and security to those that pay in – is a goal worth achieving. The benefits of such a system would include improved supports at different life stages and acts as a safety net at difficult times, for example:
- better sick pay entitlements;
- paid parental leave;
- enhanced medical and other treatment benefits; and
- unemployment benefits that are linked to the level of contributions.
The social insurance system will move to a Total Contribution Approach for state contributory pension entitlement and ensure that a long record of contribution is recognised in entitlement.
A new deal for the self-employed
This reformed social insurance system is linked to our ‘New Deal for the Self-Employed’. The reformed social insurance system will work to provide the self-employed and those in the ‘gig’ economy with a safety net in circumstances where their business or careers are interrupted. In Budget 2019, we extended Jobseekers Benefit to the self-employed and will expand other benefits, such as Carer’s Benefit, in the years ahead. The equalisation of the Earned Income Tax Credit with the PAYE Tax Credit is also part of this agenda.
A fair and improving Minimum Wage
In December 2010, Fianna Fail cut the Minimum Wage to €7.65. This hit the lowest earning workers the hardest. Since Fine Gael came to power in 2011, we have increased the Minimum Wage to €9.80 an hour. This is among the highest in Europe, which is appropriate given our high national wealth and high cost of living. We will continue to be guided by the Low Pay Commission, which brings together employer and employee interests and makes recommendations as to what changes should be made to the wage rate guided by broader economic developments.